Corn harvest...What do you think about this?

Greg1959 · Oct 4, 2015

I raised corn in the mid to late 1990's.

"DES MOINES, Iowa ? With a corn harvest that's shaping up to be his best ever, Steve Anderson hopes the added grain he puts in his bins means he can break even this year, maybe even put some money in the bank."

This guy has 3400 acres. I hope it works out for him.
Poke here

d282 · Oct 4, 2015

That is pretty sad considering his father-in-law owns all the land!!

Don't feel sorry for him one bit!

JD Seller · Oct 4, 2015

This price correction should have been no surprise to fellows. Just back in Sept. 2010 we had $3.50 corn. A world wide shortage of feed protein is what drove the markets up. Ethanol is a small player in the price run up. So with higher prices everyone ramped up production and BID crazy on rental ground. So now the results are coming in. Anyone paying over about $250-300 an acre rent for good ground is going to lose money on that very same ground. There is a lot of $450-500 an acre ground rented around here. It will take time for the inputs to fall in price. Some of them may not fall in price depending on world wide demand.

Much of this rented ground will have to have a change of tenants for the rental price to fall. My boys and I have had over ten calls from land owners wanting to rent us their ground. The trouble is they want two year ago rental prices. Most of them just will not believe that they market rise is over. The gravy train is GONE!!!

So if the fellow has a record yield it will make up for some of the lower price per acre but I think he is dreaming. The corn is not that much better where he is. The soybeans maybe but not corn. He is blowing smoke up some reporter butt. The grain only farmers are going to take a severe hit in income. They have been spending like drunken sailors and it is coming home to roost.

I know of several that have already been told that the bank is only going to allow so much for rent. Anything over that and they will NOT get operating money. This is very similar to what happen in the 1970s. Prices took off and guys started spending money like those prices would never end. The very same issue is hitting them today. They are lucky that the interest rates are low and the Government is not playing politics with the grain.

The long and short of it is there will be guys go broke in the next 6-18 months. Not way around it. There will be auctions.

paul · Oct 4, 2015

Yea, farming is all about price swings in commodity markets, its pretty tough to stay on the right side of that all the time.

What puzzled me were the ones that went bankrupt a couple years ago - like Stamp Farms - when it was gravey. Man, if they couldn't make their numbers work when prices were at the peak.....

Gonna be some lean times for many of is, just part of the price swings.

When things were better a few years ago, I put a lot of it into tile. Figured that would make better land, better crops for me year in and year out even if corn is $2, it will be best to have more bushels for the next few decades rather than shiny paint for a few years.....

Paul

Eldon (WA) · Oct 4, 2015

(quoted from post at 20:32:57 10/04/15) This price correction should have been no surprise to fellows. Just back in Sept. 2010 we had $3.50 corn. A world wide shortage of feed protein is what drove the markets up. Ethanol is a small player in the price run up. So with higher prices everyone ramped up production and BID crazy on rental ground. So now the results are coming in. Anyone paying over about $250-300 an acre rent for good ground is going to lose money on that very same ground. There is a lot of $450-500 an acre ground rented around here. It will take time for the inputs to fall in price. Some of them may not fall in price depending on world wide demand.

Much of this rented ground will have to have a change of tenants for the rental price to fall. My boys and I have had over ten calls from land owners wanting to rent us their ground. The trouble is they want two year ago rental prices. Most of them just will not believe that they market rise is over. The gravy train is GONE!!!

So if the fellow has a record yield it will make up for some of the lower price per acre but I think he is dreaming. The corn is not that much better where he is. The soybeans maybe but not corn. He is blowing smoke up some reporter butt. The grain only farmers are going to take a severe hit in income. They have been spending like drunken sailors and it is coming home to roost.

I know of several that have already been told that the bank is only going to allow so much for rent. Anything over that and they will NOT get operating money. This is very similar to what happen in the 1970s. Prices took off and guys started spending money like those prices would never end. The very same issue is hitting them today. They are lucky that the interest rates are low and the Government is not playing politics with the grain.

The long and short of it is there will be guys go broke in the next 6-18 months. Not way around it. There will be auctions.

Well, lower prices force more production which lowers supply of inputs.....thus raising price of said inputs and lowering profits even more. It's a rat race for sure.

BTW, I'm looking for a good New Holland 185/195 manure spreader....just in case anyone sees one at auction.

Bruce from Can. · Oct 5, 2015

Tough break for crop growers for sure but, I buy 10-12 tons of dairy ratio each month and welcome the lower price. All depends on who's ox is being gored.

David G · Oct 5, 2015

It is like the 20s, super high grain prices, put everything into production, then prices tanked.

Leroy · Oct 5, 2015

DO NOT TRY TO OPEN the link. I did and part way reading artical computor went crazy and to get away from link I had to shut down computor and restart.

DoubleR · Oct 5, 2015

{ had the same problem. Never did see the video.

MN Scott · Oct 5, 2015

Cattle market is doing the same thing the grain market has done the past two years, correcting. Lots of guys spent way to much money buying cows and calves the last couple years. Going to be some tough times all around.

LAA · Oct 5, 2015

Anyone who has been farming more than 2-3 years and still has to borrow operating money is already broke, they just haven't realized it yet.

Tech 7 · Oct 5, 2015

You can run without an operating loan???????

keh · Oct 5, 2015

What's going to happen to those huge combines and tractors and other equipment now if it hasn't been paid for? Is the used machinery market big enough to handle a lot of machinery that has to be sole?

KEH

NY 986 · Oct 5, 2015

Nearly everybody around this area has operating loans. I am sure a few have reduced their needs with the profits made the past few years but historically they needed an operating loan.

farmerwithmutt · Oct 5, 2015

I don't borrow money if I can't afford it I don't need it . But a lot of guys were ordering steak when they could barely afford hamburger.
Part of my ground is rented the equipment he needs is all in good shape but nothing extra he also is planting seed crops for extra value. There are a few high flying farmers around but they get away with it one had over 100,000 dollars interest wrote off and he just bought a second farm . The scary thing to me is a lot of banks are so far in that the can't sell them out without out going under themselves

IA Roy · Oct 5, 2015

D282 do you live in the area. He lives about 10 miles south of me. I used to know his FIL about that far east of me..
I am not sure if he is the only one in his family farming, but they have had a lot of trucks on the road for years.

LAA · Oct 5, 2015

Yes. I run without an operating loan, same as my Dad, same as my Granddad and Uncles did. Utilizing cash in hand allows a person to be more flexible and make decisions based on current market conditions and economic reality instead of being ruled by the absolute need to generate cash flow whether the activity includes profit or not. Look at the cattle business the last 3 years, I doubt there will ever again be a perfect storm such as the fall and winter of 2013/2014 in my lifetime, if you were a calf or stock cow buyer/trader it was virtually impossible to lose money under sound management practices, but as the market matured over the summer of 2014 up until the spring of 2015 the situation rapidly changed, many who bought on borrowed funds in that time period are now in the hole facing a loss or default while debt free operators who mostly operate in the sell/buy mode are simply adjusting their numbers in a new cycle.

504 · Oct 5, 2015

About 15 years ago used combines were being sold for less than $500.00 and headers were going for $50.00 at auction. The price of bean and corn are not reflecting yields around here. We may be in a small bubble but there a lot of fields that were not planted,too wet.

wi red dairy man · Oct 5, 2015

I use an operating loan for seed fertilizer and fuel every year. Enables me to take advantage of preseason discounts and only one payment. Vs accounts with several vendors that charge 18 percent interest or more after 30 days. I'm not proud nor ashamed of it. Just makes sense for me at this point in my farm career. Plan is to get farm paid for and then there won't be a need for operating loan. I'm 33 years old and hate being in debt but not near as much as I hate working for someone else so lesser of two evils. I do agree the ag economy is not so hot right now but that's why you pay extra on bills and save for a rainy day when able and watch for good deals on faded paint when markets are poor. Otherwise when prices are good so is machinery prices.

Corn harvest...What do you think about this?

Greg1959

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d282

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JD Seller

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paul

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Eldon (WA)

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Bruce from Can.

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David G

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Leroy

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DoubleR

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MN Scott

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LAA

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Tech 7

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keh

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NY 986

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farmerwithmutt

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IA Roy

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LAA

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504

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wi red dairy man

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